Colorado Springs' housing woes are no surprise to local homebuyers, many of whom can't find a house because of a shortage of properties for sale and then must pay thousands of dollars above a seller's asking price to lock in their purchase.
Likewise, builders have said they've struggled to keep up with demand. There aren't enough home sites upon which to build, while skyrocketing lumber and construction material costs and a lack of labor have forced them to hike prices. That puts new homes out of reach for many buyers.
Now, community leaders increasingly worry that soaring prices and a lack of affordable and attainable housing options could imperil local businesses and the Colorado Springs-area economy.
"The housing crisis we're in, and it is a housing crisis, threatens the success and the profitability, the prosperity of our business community," said Dirk Draper, president and CEO of the Colorado Springs Chamber & EDC.
"Our current businesses can't expand if their employees can't afford to live here and can't afford to find housing," he said. "Unaffordable housing threatens our ability to attract new employers to the region, to diversify our economy, strengthen the depth of our business community."
Draper's comments were among the warning bells sounded Friday during a community forum sponsored by local housing industry and business groups, who say they're seeking solutions to problems plaguing Colorado Springs' residential market — the same concerns faced by many cities nationwide.
The forum was the first of three discussions planned by the Chamber & EDC, the Housing & Building Association of Colorado Springs, Pikes Peak Association of Realtors, Apartment Association of Southern Colorado and the Downtown Partnership. Two more forums are targeted for later this year.
The forum took place at Centennial Hall in downtown and was attended by a crowd of about 60 people that was limited in size because of COVID-19 safety protocols, though the event also was streamed live via Facebook and El Paso County's online TV channel.
Colorado Springs Mayor John Suthers lauded the Pikes Peak region's residential and commercial real estate industries; they've remained exceptionally strong in the wake of the pandemic over the last year, with record levels of single-family, multifamily and commercial construction, he said.
Rising home values and the area's growing population also are signs of the "resiliency and desirability" of Colorado Springs, which national publications such as U.S. News & World Report have rated as a top place to live because of its economy, quality of life and other factors, Suthers said.
Yet, spiking prices and a shortage of homes are genuine worries, he said. The median price of homes sold in Colorado Springs and a handful of Front Range counties climbed to a record high of $410,000 in March, while the number of single-family homes for sale that month was at a near record low of 462, according to the Realtors Association.
During regular meetings he has with real estate agents, builders and business officials, Suthers said he typically asks how many homes are for sale on any given day in Colorado Springs.
"One day last week, when I inquired, there were 95 single-family houses in this entire city listed for sale at under $600,000," he said. "I understand a year ago it was well over 1,000."
Suthers added: "There's no question that it's a good time to be in the housing business in Colorado Springs. It's just not a good time to be looking for a house in Colorado Springs."
As part of the forum, keynote speaker Elliot Eisenberg, the "bowtie" economist known nationally for his neckwear and free-and-easy explanations of financial matters, took attendees and online viewers on a 90-minute overview of local, state and national economic and housing trends.
The national economy has made "tremendous strides" since the onset of the pandemic a year ago, thanks in large part to government relief programs, consumers who have spent stimulus checks instead of saving them and purchases of goods by homeowners who have fueled the manufacturing sector, among other pluses, Eisenberg said.
"Whatever you make as a manufacturer you can sell it," Eisenberg said. "We have these insatiable needs. We can't go to Europe. We can't go here, we can't go there, we're stuck in our house. We can't travel internationally. We can't see our cousins. We can't see our parents. We can't see our kids. We can't see our grandkids. I'll buy an RV. I'll buy whatever it is."
But while the national economy has improved significantly, the housing industry remains dogged by a lack of supply, he said.
Builders "simply can't build enough homes" and the problem has exacerbated a shortage that goes back at least a decade and has left the nation five million homes short of what it needs to satisfy demand, Eisenberg said. That problem began after the Great Recession, when builders slowed construction, banks wouldn't lend them money and buyer demand cooled.
Now, despite a "crazy and hyper" market, builders can't keep pace, Eisenberg said. The problem is especially acute for first-time buyers looking for less expensive starter homes, which builders say they can't provide because of a lack of land, government regulations, increasing costs of materials and a shortage of labor, he said.
On the resale side of the market, wealthy newcomers are moving to states such as Colorado, buying homes and driving up prices; millennials increasingly look to purchase; and institutional buyers and investors are gobbling up large numbers of homes to rent at hefty rates, which keeps them out of the hands of owner-occupants and further shrinks the supply, Eisenberg said.
"You need a fricking electron microscope to buy a house for sale around here," he said "And buyers are just desperate."
But there is no single solution to the supply-and-demand problems, rising prices and the desire for communities such as Colorado Springs to provide more affordable housing options, Eisenberg said.
The Springs and other cities should encourage construction of all types of housing — including single-family houses, single-room occupancy facilities and so-called micro housing, modular and manufactured homes and accessory dwelling units, he said.
Allowing greater housing densities, implementing dynamic or flexible zoning to respond to market changes and taxing vacant land at higher rates to encourage its development are among several additional strategies that communities might want to consider, Eisenberg said.
"I wouldn't say it's intractable, that's a depressing thought," Eisenberg said of housing problems. "But it's hard. And we all have to work hard at this together, to try and think of four, five, six, seven do-able things that are possible.
"The impossible? Forget," he said. "The silver bullet doesn't exist. One solution's not going to solve our problems. But if we try a half a dozen or a dozen of these things, we may get some traction. And we have to get the existing homeowner population on the side of building more homes."